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Answers to Option/Futures hedging question in percentage terms

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Answers to Option/Futures hedging question in percentage terms

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.
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  • May 25, 2019 at 12:14 pm #517292
    bik123
    Member
    • Topics: 57
    • Replies: 81
    • ☆☆

    Dear Tutor,

    I have a question regarding answers to questions about hedging using option or futures. Sometimes BPP in answer shows just percentages when working out effective annual cost of loan (e.g. Alecto BPP Revision Kit) without calulating actual numbers. Its obviously quicker way (e.g. for premium we show only % cost instead of multiplying % by number of contracts and contract size). My question is, is it acceptable technique for exam, can i expect full marks showing only calculation with %?

    Thank you

    May 25, 2019 at 3:27 pm #517310
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54733
    • ☆☆☆☆☆

    It really depends on exactly what the question asks for. If it is not specified, that showing the answer as a % will get the narks 🙂

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